A common belief in business states‘ the structural decision items of an operation's strategy are a reflection of the hardware components of the firm, while the infrastructure decision consequently, represents the firm’s software’. This is an analogy borrowed from computers that reflect on how important structural decisions are to the firm. Hardware is the backbone without which software would have nothing to run. There are heavy investment decisions that cannot be changed without incurring significant losses. They demand deliberate considerations about operations spread in different countries and demographics (Kayne, 2009). They include facilities decisions, process technology, capacity management and supply networks. Infrastructural decisions involve management of systems and procedures that physical assets operate. Though easier to change than structural decisions, they require complex deliberations.
Similarly, they deal with backbone operations of management and planning and control. They are purposed to match the organization operation’s supply with customer’s demands. Infrastructural decisions include Quality, Human Resources, New Product Development, Work organization and Performance Measurement. Though the statement implies that structural decisions carry more weight, they are both important since a computer is only as good as both the software and hardware. As an informal paraphrase of the theory of constraints would say, “a chain is as strong as its weakest link” Structural decision items form the “building blocks” of an operation influencing its visible form and architecture. On the other hand, infrastructural decisions affect people, systems and culture that inform the decision-making process. Once bought it is expensive to acquire a new hardware because this requires buying a new one which involves an opportunity cost of money. Structural decisions include the choice of where to locate an operation, the buildings and plants to put up. The setting up of this infrastructure requires large amounts of financial backing as well as possibly a long period. Once they have been set up, enlarging them involves a huge expense as well as time. Not to say, the cost of relocating (Kalaiselvi, 2009). The location of the firm has a huge impact on its ability to attract clients, especially if it’s a service oriented organization.
The Quality of products can be improved in response to market demand. Just as software can be upgraded to meet the user’s needs. Boston Communications Group is a leading telecommunication giant that has undergone scheduled periodic upgrading. The upgrading has been taking place during weekends when there is little traffic. Bank of America is among the leading Banks in the USA. Any discrepancy that may be brought about by this bank can gravely affect the economy. It is inevitable that a network jam can catapult problematic instances that require due correction. Since the two companies are competitors in the financial sector, competing for the low end market can result to circumstances that are totally uncalled for (Croll, 2010). Quality is an integration of all business processes to meet and exceed by far, the customer expectation through continuous improvements by every employee. It does not involve as much capital investment as setting up the infrastructure, notwithstanding, the investment it requires. Quality processes are flexible. Though for some industries, such as a wine business, the quality of century's past is maintained as a tradition and selling point, in most industries, from banking to technology, quality processes work for the organization well when they are kept fluid, able to be tweaked and improved as it becomes necessary. Capacity management is defined as the management of an organization’s resources.
These resources include manufacturing and office space, raw materials, technology and equipment, inventory and its labor force. Human resource is comprised a person or people of individuals who make the firm’s workforce. In this way, human resource can be seen as a subset of capacity management. While it may be easy to fire an underperforming employee, it is not as easy to overhaul the recruitment policies and procedures that got him employed. Capacity management often follows long established ethos and rules. In the year 2013, there was an outcry over the generous compensation package awarded to the outgoing Nokia CEO, it seemed like the company was rewarding him for simply selling the company at a given price. It emerged that his employment contract included a clause guaranteeing a generous compensation package should he sell the company at a set price (Daves, 2009). The Board has a legal obligation and mandates to ensure the return on investment for the shareholders. When Marisa Meyer took over the reins at Yahoo to oversee the Renaissance of the search engine, she abolished the Work from Home policy in an effort to advance collaboration and innovation. The compensation structure of top firms in the United States is a long established practice and though there have been calls for a regulation on the pay, Wall Street founded on the capitalist ethos of rewarding hard work, seems unwilling to budge. New product development is the process of conceptualizing, designing and developing new products. It may involve creation of new product lines which are the invention of products that serve previously unchartered for needs. Like the introduction of the iPhone which spawned a new era of mobile apps and charted a new product category of handheld devices, the firm’s process technology would entail an opportunity cost in production during the duration of moving the systems to a new process.
It is also expensive as new equipment and infrastructure have to be bought and installed. While new product development requires an investment in research and development, they follow processes technology, “the hardware’’ of innovation in an organization. Structural decisions tend to have a long view while infrastructural decisions tend to have a short term view. Take for example WhatsApp. The founders had a vision of utilizes internet to bypass costly messaging offers by telecom companies. It is likely to last a long time as it’s their value proposition while the organizations commitment to stay independent did not last long, being sold eventually to Facebook (Vogell, 2012). Their aberration of ads remains to be seen, whether it will last or if the pressure to generate revenue shall force them embrace advertising.
Structural decisions have a legacy effect. Steve Jobs commitment to making the tiniest but most powerful handheld device, created a legacy of products that are great on design and greater on customer experience. It is a tradition that Apple finds itself chained to. It is what we expect of it. His decision, however, to use overseas accounts in Europe so as to reduce their tax burden has led to an otherwise popular company being bundled with the rest of the “evil corporations”. It is a practice that a future leadership may be bound to change for moral reasons. Changing the trend towards smaller, curvier, slimmer devices may affect the company’s balance sheet is a part of the value proposition that drives millions to Apple stores (Nelson, 2011).
Supply network means patterns of procedure employed within a plant and over distribution connections and enhancing of value to consumers through delivery improvement and general quality assurance of product at production level. It encompasses the general operation of a business in which stage wise movement of raw materials and finished goods is observed from a point to the other with the aim of enhancing value for the customer.
There is no standard period for building a powerful supply network; it is all pegged shrewdness of the supply chain logisticians and acumen of the administrator involved, a good team would take a short period to understand the dynamics and set a stable supply network quickly, poor team would take ages. However, the supply network should be able to cope up with the ever changing business environment and ensure the business remains to be a going concern. It should be engineered to support high volume production by capitalizing on labor-arbitrage opportunities available (Briscoe, 2012). A firm’s supply chain is the vehicle that propels a product from the source to the point at which the customer finds it useful. Successful organizations round the globe, ranging from large scale retailers to those manufacturers who produce sophisticated electric appliances use a powerful supply chain as a ladder to climb to success. A supply chain is a system that utilizes people, information, ideas to move the goods from the manufacturer through a series of middle people to the customer the supply chain may be direct or a chain of complicated business transactions, involving millions of people to finally, deliver the product to the consumer. (Ishmael, 2012).
The global supply chain spans the five continents. Apple uses minerals sourced from Africa; it is assembled in China completing a production process, which starts with its design at Palo Alto, California. The profits are then ploughed into European tax havens. An example of global supply juggernaut that today’s Chief Operations Officer overseas. Disruption and interruption have become more important as supply chains extend through the world, and their complexity grows. The risks escalate as the company becomes a global operation dependent on emerging markets. Once established, changing supply chains becomes difficult and costly. It would explain Apple’s measured response to the accusations of labor malpractices at Falcon, its Chinese assembler.
A case in point of the impact of climate change on supply chains is the case of Russia, summer 2010. Following a prolonged drought, by August over one-fifth of Russia’s wheat grain had been destroyed forcing the government to ban all grain exports. This put price pressure on food manufacturers such as General Mills forcing them to announce price increases of 4%-5%.Wheat price futures reached two year highs. The same case with oil, whenever there is a crisis in the Arab world, oil prices per barrel increases. Hardware evolves slower than software. Infrastructural decisions can be changed easily without significant cost in keeping with best practices. With the world becoming a global village, organizations have to prepare for the threats and opportunities that globalization brings .The changing nature of work, the workplace and organizations are fascinating. Work, today, is not like it was in 1960. It is now mobile, and time pressured. It calls upon social skills and technological competence. It teams are based and collaborative. Cloud and growth of internet connectivity means that people in differently geographical locations of the world can collaborate on projects together. Advances in technology promise greater evolution (Brown, 2009). Internet of Things makes some jobs redundant; jobs of the future will not be your repetitive ones rather analytical, interactive and reliant on data.
Structural decisions involve the purchase and laying of the infrastructure that is require while infrastructural decisions would involve a choice of how they will be used. How they are used could change as more technological solutions come to the market. Investment in the infrastructure would require a lot of capital investment while the choice of how to use it does not require any cost. The infrastructure bought would be expected to last long while the use of the systems would be expected to evolve as employees learn more, as the firm expands and as technologies advance (Cumming, 2010). Structural decisions are important in shaping the firm’s long-term position while infrastructural decision items are short term. It is not enough to be in a great location or to have a great product. With the explosion of social media, the day to day operations of the firm as important as ever. A dissatisfied employee or customer tweeting about their experience would bring a barrage of hash tags to the firm’s door, with their inherent image damage.
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